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RBI alters bad loans divergence rule for banks

The Reserve Bank of India (RBI) headquarters in Mumbai. (Aniruddha Chowdhury/Mint)Premium
The Reserve Bank of India (RBI) headquarters in Mumbai. (Aniruddha Chowdhury/Mint)

  • Banks should disclose bad loan divergences if the additional provisioning has exceeded 10% of the company's profit before provision and contingencies
  • RBI did not change any rules that permit lenders to reveal divergences if additional gross NPAs exceeded 15% of the reported incremental gross NPAs

Bengaluru: The Reserve Bank of India (RBI) said on Monday banks should disclose bad loan divergences if the additional provisioning has exceeded 10% of the company's profit before provision and contingencies.

The central bank altered the additional provisioning requirements, which previously stated that banks should disclose divergences if the provisioning has exceeded 15% of net profit after tax.

The central bank did not change any rules that permit lenders to reveal divergences if the additional gross non-performing asset (NPA) exceeded 15% of the reported incremental gross NPAs.

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